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Novak on Greenspan’s True Colors

Robert Novak reads Alan Greenspan’s memoir, “The Age of Turbulence,” and finds it insufficiently conservative in its politics, particularly because Greenspan does not endorse supply-side economics. “Although appointed by Republican presidents to four of his five terms heading the nation’s central bank, Greenspan in his memoir is markedly more negative about those political benefactors than reviewers have suggested,” Novak writes in his Chicago Sun-Times column. “Only Gerald Ford, the hapless, short-term appointed president, gets passing grades.”

Novak speculates that Greenspan must have worked some voodoo of his own in order to persuade his benefactors that he agreed with their, in his view, wrongheaded economic policies. “ ‘The Age of Turbulence’ lacks the confessional candor of the best memoirs, but it tells enough to leave intriguing questions for a future biographer,” Novak writes. “Why did three Republican presidents name a Federal Reserve chairman fundamentally opposed to the G.O.P.’s economic doctrine? Did Greenspan deceive them?”

Greenspan’s monetary fixation, limit inflation, is pure GOP dogma. Limiting inflation first means a few suffer greatly, through unemployment, when necessary to wring inflationary pressure out of the economy. Inflation, on the other hand, hurts many (though the pain suffered by the massed under inflation is never as great as that inflicted on the few laid off when high rates constrict the economy). Greenspan knew this, thus he was the perfect successor to Paul Volker, the architect of this policy.

The not-so-subtle distinction between monetary & fiscal policy aside, however, it’s amazing that the GOP still sticks to its supply side fiscal dogma.

Before we “discovered” this, we were 205 years old. In that time, 2 world wars, a civil war, depressions, Korea, Vietnam, we ran up a one trillion dollar national debt.

Then we “discovered” that supply side works and tax cuts pay for themselves.

This is not the first time memoirs have dropped a few bombs disclosing the reservations of loyal lieutenants who at one time were part of a united front. It seems when these people are out from under the restraints of their awesome power, they get some perspective on what has been going on and are able to reflect about loyalty and discipline. The reaction of critics to these bombers is to ask why they did not speak up at the time. Some, like Bob Novak wonder if they were dispensing a con job in the corridors of power. Even Bob Novak, when he wrote about his early reservations of Alberto Gonzales, was accused of being too mousy to speak up at the time. It is interesting to ponder why people ignore little voices when they chart a controversial and powerful course. The answer is that there are always little voices when we do or say something important. It is a special gift to know when to pay attention to them.

It is so easy to go along to get along and take the money and celebrity. And then when you are out and your consciencve starts to tingle with guilt ( as it
did with Powell and Camarva and many, many others ) you find explanations
via articles and interviews a cleansing of your soul. When you look in the mirror you know the truth. It hurts. Eh ?

Truth is simple, it makes sense when you observe how things works. When I was just a sprout my mom shared a simple truth that she had learned from her years working for politicians on the City, County and State level. “There is no such thing as an honest politician.” Remember this, it extends to their syncophants in the press, and when they tell you how things have to be,always ask,Why?

What Novak makes perfectly clear is that the ideology of the modern GOP is vastly out of touch with true conservative economic principles and fiscal discipline. Greenspan is first and foremost a brilliant economist. He is not a political operative beholden to “The Ministry of Truth. He is a true conservative. The GOP of the twenty-first century is neither conservative nor fiscally disciplined. It is a party composed of radical spendthrifts! Oh my.. how times have changed. Reagan would be horrified to see what now passes for a conservative; fiscal or otherwise. Out of control spending and attack after attack on personal freedoms… Who would have thought that the GOP would become everything that they once vilified.

Mr. Greenspan has been a classic example of the hypocrisy which characterize Wall Street and Beltway insiders. Mr. Greenspan’s tenure resulted from one fact and one fact alone. Despite his public rhetoric, Greenspan’s primary role, which he did with great zeal, was to placate the vested interests of the financial industry (cheap money, negative interest rates, lax regulation and, if necessary, manipulation).

Alan Greenspan is a consummate bureaucratic infighter and mediocre economist and number cruncher. His refusal to speak clearly as Fed chair reflects his lack of integrity, and his history of being reappointed by the Bushes and Clinton’s shows the low bar he had to meet to win their support.

I believe people are mistaken when they think of this as betrayal. It is a prime example of people looking at it from their point of view, instead of taking in the whole picture.

Alan Greenspan and Colin Powell did show character. They took jobs, knowing they required them to show, if not loyalty toward those who gave them a job, at least silence when they disgreed. Powell, as a military professional, had the institutional motivation to do so, as you never go against your Commander-in-Chief in public. It creates dissent and fragmentation in an arena where such can be fatal.

This is not the first time this has happened on either side. Just look at George Stephanopolis when he left Clinton’s office. The paint isn’t dry on his successor’s office window before he comes out with a tell-all book. All the generals who have spoken out against the Iraq war are retired. George Tenet remained silent until he resigned from office, and gave it a year before he spoke out.

It isn’t about a great “moral enlightment”. That is a naive thought. These are, for the most part, intellectual men who are hired because of their expertise, for the most part. It is about not stabbing in the back the man who gave you a job while you are working for him. If you take a job, knowing full well what is involved(and don’t deceive yourself. All these gentlemen knew what they were getting into), you either do it the best you can and keep your mouth shut, or you leave the job. No one told you you were required to take the job. Colin and Alan showed their disagreement the best way they could. Colin left a year after Iraq started, after getting his office in order. Alan left after seeing that Bush’s “temporary” cuts were going to be permanent, and that spending was going nowhere but up.

Novak can look at it as abandoning loyalties and deception. If so, is he saying that Greenspan would have done less damage to Bush if he had come out in 2003? Or if Powell had said, “Mr. Bush, this war is BS,” in front of the press corps in 2004?

As far as Greenspan being a “mediocre economist: the man was the head of Goldman & Sachs, and made them more money than any time before. He also presided over an economy whose yearly budget went debt-free for the first time in decades. We’ll just let that speak for itself.

IF one assumes that the role of the Fed Chairman is to buttress or pursue a particular ideology, then Novak is correct to wonder what ANY of the presidents who appointed Greenspan were thinking.

IF one assumes that the role of a Central Bank is to foster long term prosperity through creating at least the necessary illusion of economic stability (by minimizing the impact of the natural swings of the business cycle and ensure that markets remain liquid enough to adjust to any external shocks with minimum fuss and muss), and that the role of the Central Bank’s leadership is thus to both project the necessary degree of confidence to inspire trust in the markets while simultaneously keeping the Bank’s cards close to the chest in case drastic action is required (hence the abstruse language of “Fedspeak”) then Greenspan’s long string of appointments by presidents from both sides of the divide is not surprising.

Capitalism, for all its virtues, is in practice often an ugly thing. One wonders if Novak appreciates the mechanisms by which global and national markets function, and how little the “invisible hand” cares for the finer points of philosophy.

I’m not a fan of Mr. Greenspan, but this topic raised the following question in my mind: Why does anyone pay any attention to what Robert Novak thinks (or says he thinks), at this point in his career as a “journalist”?

Mr. Greenspan has finally admitted that he did not have the strength of his convictions in being more vocal about deficits, and supply side economics.
Hindsight is always nice, but for someone with Greenspan’s stature and supposed insight and knowledge, he missed the boat too often by not speaking out. – One Sec’y of the Treasury was canned when he correctly predicted that the Iraq war would cost in excess of $200 billion, when Bushies claimed $50 billion. – Does this suggest that Greenspan was worried he might not be re-appointed> The Fed Governor is supposed to be independent.
If he had been as competent as everyone thought him to be, we would be in a lot less fiscal trouble now.

Read Mr.Greenspan’s comments as excerpted in Newsweek, and you will be jolted by a creepy deja vu experience: every detail of his assessment of every president from Nixon to Bush ii faithfully reflects conventional wisdom, nothing more. Mr. Greenspan occupied such a lofty perch in American government for such a long time that it is disappointing that he has nothing new to add to the public’s understanding of our recent presidents. This can only be an artful omission, to put it politely, because the world has watched in Mr. Greenspan a wily politician, an adroit surviver with a keen intellect. Why be so coy?

Gee, could it be that Alan Greenspan recognizes that supply side economics is actually a form of class warfare that has been being waged by the rich and the well-connected against the bottom 80% of the population for the last 26 years?

Or that he understands that an economic policy dedicated to concentrating wealth in the hands of the few is not a formula for long-term economic health in an economy where 2/3’s of all economic activity is generated by consumers?

Greenspan did a remarkable job during his tenure, garnering the respect of many many people. His word drove the markets, and often people would look to him for an indication of how things were going. Whatever his personal views were or are is irrelevant to his performance. Novak knows better than most about being two faced; at least Alan Greenspan ended his storied carrer well respected.

It’s good to see that the I’m not the only one to keep noticing the emperor’s lack of clothes — wnenit comes to class warfare. As I have mentioned elsewhere, class warfare has been raging under the radar in this country for a long time now, but the winning side has been stunningly successful in convincing the losing side that both are winning and even if this is not so, it is bad manners and downright un-American to recognize the existence of the conflict.

Consider what passes for labor-management relations these days and the state of the Unions. GM workers just went on strike and I’ll bet the barn plus my first-born that they are going to end up, as workers everywhere, with a contract containing substantial give-backs of hard-won wages and benefits. All this while “productivity” keeps climbing steadily. The bottom line is that workers run faster and faster to just stay in place by sacrificing the quality of life. Multiple jobs, multi-income households, holiday and week-end work, scant vacations …

The winners in this conflict is so good at their game that they have convinced their their adversaries that everything is fine with the system the way it is and the only things to fear are “big government,“ “socialized medicine” and “class warfare” the last of which to be defined as any attempt to call attention to the simultaneous phenomena of the rich getting richer by the minute and the working stiff transitioning from the middle class into the ranks of the poor. Mention this obvious fact seen all around us, and the veterans from the winning side of class war will be all over you pointing fingers and in utter shock: “Class-war-mongering! How un-American!”